Here are the top 5 things you should know when shopping for a home warranty.

5. Unauthorized Repairs or Reimbursement: Calling a repair company and having a problem fixed—without prior approval from your home warranty—is not a good idea if you are expecting to be reimbursed. You should notify the home warranty company of a repair issue first, so they can send out an authorized service provider. On rare occasions, a home warranty company may provide you with an authorization to have the service performed by a contractor of your own selection.

4. Pre-existing Conditions, Improperly Installed or Mismatched Equipment, and Poorly Maintained Systems: Be sure home systems and appliances are in good working order upon the start date of a warranty. Any malfunctions or problems that fall into the above categories typically are not covered. However, some providers are now offering upgrades that include coverage for these issues that are normally denied. Home warranty plans typically only cover repairs or malfunctions caused by normal wear and tear.

3. Indirect, Special, or Consequential Damages: We recommend calling 911 if your home is on fire—not your home warranty company; they are the ones with the hose. This is another way of saying: home warranties do not cover damage from weather, accidents, acts of God, mold, fungus, structural changes, vandalism, pests and pet damage. So, if your water heater spills 50 gallons of water into your client’s house, the home warranty owes your client a new water heater, not a new carpet. Oh yeah, they also don’t typically cover damage caused by attempted repairs—so keep your husband away!

2. Items Outside the Perimeter of the Home: With the exception of your pool/spa and HVAC equipment, items outside the perimeter of your home are not typically covered by your home warranty plan. Some people are surprised to learn that the plumbing leak in the yard is not covered. But, it is a “home” warranty and not a “yard” warranty, and most home warranty contracts exclude these types of leaks from coverage.

1. Read the Contract: Do you read the back of your Valet ticket? We don’t either. But, we should. Unfortunately, you shouldn’t assume home warranty contracts are all the same. We encourage you to read and get an understanding of your home warranty contract, so you can use it more effectively. Yes, about 80% of the contracts of the various home warranty providers are similar, but that 20% difference can be substantial!